Texas Latinos have most to gain from Medicaid expansion, while GOP counties have little to gain

Republican leaders in Texas have ideological opposition to Medicaid’s expansion, but also have little political reason to expand a program that would primarily benefit a constituency leaning towards the Democrats.

“Texas will not be held hostage by the Obama administration’s attempt to force us into this fool’s errand of adding more than a million Texans to a broken system,” Gov. Rick Perry said at April 1 news conference. “That’s not just me who said that, by the way. In 2009, President Obama, himself, called Medicaid a broken system.”

Medicaid expansion will begin in January 2014, under provisions from the 2010 Affordable Care Act, often called Obamacare. Medicaid provides medical coverage for low income families and the disabled. The expansion will increase the poverty threshold, allowing those making 138 or less of federal poverty level to be eligible. From 2014 to 2022, the federal government will cover the 93 percent of the expansion funds, according to the Congressional Budget Office.

The expansions were to be mandatory, but a Supreme Court ruling in the summer of 2012 allowed states to opt out of the program.

Texas is one of 14 states that will not participate. Texas has the highest rate of uninsured population in the country at 24 percent, according to the Kaiser Foundation. For those with incomes 139 percent of the poverty level—those eligible for Medicaid expansion—Texas is second in the nation at 43 percent, one point below Nevada.

Kaiser data also show that a disproportionate number of Texas Latinos are uninsured. A majority of the uninsured in Texas—60 percent—are Latino, despite being 38 percent of the population. Latinos have an uninsured rate of 38 percent in Texas, compared to the statewide average of 24.

Texas appears to be an ideal candidate for Medicaid expansion: The worst health coverage rates, the promise of federal dollars, and its own estimated budget surplus of $8.8 billion.

Taking a bird’s eye view of all 50 states and their decision on Medicaid expansion, a profile begins to emerge that has nothing to do with health insurance figures.

Republicans completely control 13 of the 14 states that are not expanding Medicaid, as they do in Texas. Iowa, the lone exception, has a Republican governor and House, but Democrats control the Senate. Of the 22 states where Republicans have complete control, only five are accepting Medicaid. The three largest of these—Florida, Ohio, and Michigan—were states Democrats won in the 2012 Presidential election. North Dakota and Arizona are also expanding Medicaid.

A similar dynamic exists for Democrats. Of the 12 states where Democrats have complete control, 11 have opted to accept the expansion, with West Virginia undecided.

Insurance rates seem to have little to do with a state’s decision to opt in to the program. Massachusetts, with a miniscule 4 percent uninsured, will opt in. Joining Texas in opposing its expansion are Georgia, South Carolina, and Louisiana—all near Texas at the bottom in health coverage.

Map of Uninsured

A map of counties by uninsured, where red are the below average counties for Texas, and green are the above average counties. Eastern Texas counties tend to do better, while border counties and the Panhandle are worse. Move between the tabs to look at the counties by percentage of Latinos and vote margin for Republicans in the 2012 election.

Latinos are the fastest growing ethnic group in Texas, and are a majority of Texans without insurance. Texas Latino household incomes are about two-thirds the average, indicating Medicaid would disproportionately benefit this group. Yet with low voter turnout, most breaking for Democrats at the ballot, and with few significant competitive races hinging on Latino support, Texas Republican leaders have little reason to make the issue a political priority.

For many Texas Republicans, winning the party primary is the key election hurdle. Just ask David Dewhurst.

The worst area for health coverage are the counties along the border, many ranging from 30 percent uninsured to Texas’ leading county, Hudspeth at 43 percent, according to data from the Population Health Institute.

Jose Luna Jr. has worked as a clinical physician in El Paso for 30 years, serving many of the uninsured. Luna, currently the chief medical officer at Centro San Vincente, strongly supports the Medicaid expansion.

“There are people that I know that will die because of a lack of healthcare,” Luna said in a phone interview. “Patients that I have seen have a higher probability of dying simply because they have a lack of healthcare.”

Luna said he has lists of such patients, including one truck driver who lost his job after a stomach cancer diagnosis. Unable to work, the man lost his health insurance and relied on the clinic where Luna worked for care. The patient was unable to see an oncologist, and Luna said the only care he could provide was painkillers.

Luna said many Latinos in his community work service jobs without the full benefits many other sectors provide, explaining the dearth of insurance coverage.

“Health care should be a human right, not a privilege,” Luna said, describing the attitude towards healthcare he sees in many Latinos. Though Latinos are disproportionately affected by a lack of insurance in Texas, Luna said his support for Medicaid expansion was universal.

Republicans in Austin have little to fear in the short-term in their opposition to Medicaid expansion. However, national Republicans, who made courting the Latino vote a priority after the 2012 election loss, may take a different perspective. A Kaiser Foundation poll found that Obamacare was supported by a two-to-one margin among Latinos nationwide.

Ideological Divide

Some very conservative, non-Latino counties suffer from poor health insurance rates, such as the Panhandle. This is unsurprising in a state where not a single county is above the national average on health coverage. There may be little support in these regions for solving that with a government-run program and federal tax dollars.

The Texas Public Policy Foundation articulates many of the arguments advanced by Texas Republicans on Medicaid. John Davidson is a healthcare policy analyst at the free-market oriented think tank. He said Medicaid recipients have limited access to care, the system is wasteful, and will create budget issues.

“Medicaid as it is, is a broken system,” Davidson said in a phone interview. “Putting 1.5 million people into the Medicaid program is going to exacerbate problems.”

Davidson estimated that only 31 percent of Texas physicians currently accept Medicaid, mainly because Medicaid reimburses providers at about half the rate of private insurance companies. In private, insurance, the co-pay system encourages consumers to be selective in the care they seek, according to Davidson.

“You don’t have that dynamic with Medicaid,” Davidson said. “And what’s even worse is you don’t have that dynamic with a Medicaid patient.”

Davidson said his group would support an expansion of Medicaid, but only if Texas was given a block grant to allow for its own tinkering with the system. Davidson would like to see a defined contribution system as opposed to a defined benefit system. Medicaid patients could invest in a private plan or in a health savings account under Davidson’s suggestion.

On the other side of the issue, Waco-based economic research firm The Perryman Group joined Texas Democrats in urging Texas to accept Medicaid expansion. Ray Perryman, the firm’s president, said the main reason for his support is to improve the overall quality of life for many in Texas.

“It will partially defuse a demographic time bomb that could have notable negative consequences for Texas,” Perryman said in an email exchange.

Perryman said the large uninsured population in Texas will create negative economic results in the long-term, just as increased coverage would cause the reverse. Perryman argued that while the state will have to increase its Medicaid budget, the economic boost to having a healthier population will more than compensate.

“The health care needs of Texans do not simply go away because individuals do not have insurance coverage,” Perryman wrote in his report.

Perryman said that those concerned with the budget should be happy to embrace a Medicaid expansion. Though he concedes Medicaid costs are increasing as a percentage of the budget, he said other factors contribute to this. Medical costs overall are rising, the Medicaid eligible population is expanding, and the state already under funds other aspects of the budget such as education and infrastructure.

“Our studies and several others have shown that, with the matching formulas being many times more generous than the current program, the State budget is much better off by participating in the expansion,” Perryman said.